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THE TRIBUNE SPECIALS
50 YEARS OF INDEPENDENCE

TERCENTENARY CELEBRATIONS
B U S I N E S S

Tourism Finance to fund core projects
Chandigarh, April 17
Jumping on to the growth bandwagon in the infrastructure sector, the Tourism Finance Corporation of India (TFCI) will now finance infrastructure projects related to power, development of ports and airports and road infrastructure.

Vodafone outshines Bharti Airtel
Adds 36 lakh users in March
New Delhi, April 17
Innovative marketing styles and low tariff rates have led to Vodafone Essar adding the highest 36 lakh new users in March pushing Bharti Airtel to the second spot. Bharti Airtel, added 30 lakh users in March.

Gold falls Rs 225 on weak global cues
New Delhi, April 17
Gold lost a whopping Rs 225 to trade at Rs 16,850 per 10 grams in the bullion market here today on frantic selling sparked by negative global cues, while silver also nosedived by Rs 650 to Rs 27,400 per kg.




EARLIER STORIES

Aviation Notes
Discipline eludes IGIA
IGIA is an airport which resembles to being an “over-grown village” where jungle governance has been in operation. Indeed, it is India's busiest airport. But, sadly, there is no discipline and no understanding among several operators, who are all functioning at cross-purposes.

Investor Guidance
NRIs can avail tax-breaks on housing loan
Q: I am an NRI, holding an Indian passport and working in the USA. I booked a flat in Gurgaon on installment. Part-payment is already made and balance installments I intend to make by raising a loan from either an Indian bank with a branch in India/the USA or a foreign bank. Will I be eligible for availing tax-breaks as allowed to Indian residents in such a case and to what extent?





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Tourism Finance to fund core projects
Ruchika M. Khanna
Tribune News Service

Chandigarh, April 17
Jumping on to the growth bandwagon in the infrastructure sector, the Tourism Finance Corporation of India (TFCI) will now finance infrastructure projects related to power, development of ports and airports and road infrastructure.

Archana Capoor, chairman and managing director, TFCI, said the decision came after the non-banking finance company was recently allowed by the RBI to venture into infrastructure projects. “Till date, we have been associated with financing tourism-related projects, hotels, amusement parks and multiplexes. By venturing into financing of the infrastructure sector, especially roads, bridges, airports and power, will give fillip to tourism and hospitality projects for creating world-class ambience. The consultation paper of the Planning Commission estimates the funding requirements for infrastructure in the 11th plan of around $ 392 billion,” she said.

“There is a huge growth potential in the infrastructure sector. Initially, about 15-20 per cent of our financing portfolio will be reserved for infrastructure financing, which can go up as we attain growth here,” she said.

The NBFC proposes to enter into infrastructure financing business as a consortium partner. “Since we are a borrowing entity, we will be financing around Rs 50-60 crore per project. The TFCI plans to leverage its presence in the financial sector by funding infrastructure projects, which will enable it to grow at the faster pace. We plan to fund viable infrastructure projects either independently or in consortium with banks and other institutions. We have already received the approval from the Board of Directors as well as shareholders for this venture.”

Capoor said they planned to build a Rs 3,000 crore book in the next five years for which it also planned to approach India Infrastructure Finance Company (IIFCL), which holds a 33 per cent stake in the TFCI; 54 per cent stake is held by various public sector banks and the Life Insurance Corporation. Later this year, the TFCI is set to raise capital via qualified institutional placement (QIP), but it is not ready for a follow on offer in the immediate future.

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Vodafone outshines Bharti Airtel
Adds 36 lakh users in March
Tribune News Service

New Delhi, April 17
Innovative marketing styles and low tariff rates have led to Vodafone Essar adding the highest 36 lakh new users in March pushing Bharti Airtel to the second spot. Bharti Airtel, added 30 lakh users in March.

According to the Cellular Operators Association of India (COAI), at the end of March, the all-India GSM cellular subscriber base stood at 42.18 crore, a rise of 3.42 per cent in comparison to the previous financial year.

In all, 1.39 crore subcriber additions were registered by GSM telephony operators in the country, which remains one of the fastest growing wireless market in the world, during the month.

Airtel's total subcriber base stood at 12.7 crore, which translated into a market share of 30.25 per cent. It was followed by Vodafone Essar, which had a total subscriber base of 10 crore and a marketshare of 23.91 per cent.

In March, Vodafone also crossed the magic 100 million subscriber base mark, becoming the third operator in the country and fifth in the world to cross the number. The other two domestic operators with over 100 million subscribers are Bharti Airtel and Relaince Communications.

Idea Cellular added 17 lakh new users during March, which took its mobile user base to 6.38 crore, a market share of 15.13 per cent.

The BSNL added 24.82 lakh more users in March, which has taken its marketshare to 15.05 per cent and increased its total mobile user base to 6.34 crore.

Aircel had a market share of 8.74 per cent in March, with the addition of 20 lakh new users taking its mobile user base to 3.68 crore.

New operator Uninor added seven lakh new users in March. Its mobile subscriber base stands now 42.64 lakh.

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Gold falls Rs 225 on weak global cues

New Delhi, April 17
Gold lost a whopping Rs 225 to trade at Rs 16,850 per 10 grams in the bullion market here today on frantic selling sparked by negative global cues, while silver also nosedived by Rs 650 to Rs 27,400 per kg.

Standard gold and ornaments dropped by Rs 225 each to Rs 16,800 and Rs 16,650 per 10 grams, respectively. Sovereign also lost Rs 25 to Rs 14,025 per eight-gram piece.

Marketmen said selling pressure aggravated following reports that gold in New York last night plunged to its lowest in two months as a stronger dollar reduced demand for the precious metal as an alternative asset.

The US currency rose as much as 0.5 per cent against a basket of six major currencies, including the euro.

Gold in the overseas markets, which normally the set price trend on the domestic front here, dropped by $ 27 to $ 1,133.30 an ounce, the biggest drop since February 4. — PTI

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Aviation Notes
Discipline eludes IGIA
by KR Wadhwaney

IGIA is an airport which resembles to being an “over-grown village” where jungle governance has been in operation. Indeed, it is India's busiest airport. But, sadly, there is no discipline and no understanding among several operators, who are all functioning at cross-purposes.

The main functionaries - Air Traffic Controllers (ATCs), Delhi International Airport Limited (DIAL), the Airport Authority of India (AAI) and the Directorate-General of Civil Aviation (DGCA) - are more divided than a united entity, as they ought to be for the smooth and efficient operations.

The traffic at the IGIA continues to grow with main runway “shut down” for repairs. Queues on ground for take-off and in sky for landing have not only become unwieldy but they have turned unmanageable. It is just sheer providence that tragic incidents have not hit the airport.

The ATC is the nerve-centre of all flying operations. But it is plagued by paucity of staff; there is also acute shortage of experienced controllers in the department. On the fateful day of April 6 at 9:55 am, ATC stayed in deep slumber. The controller failed to separate flights of Air-India and Kingfisher. They came within striking range when a very sophisticated system, called Collision Avoidance System (CAS) made a noise. The aircraft were within 500 feet.

The two commanders promptly acted and managed not only separation but got on different levels.

Had CAS not made noise, another tragic accident would have occurred. The last was in November, 1996, when a Saudi Arabian aircraft and a Kazakhstan aircraft collided near Charkhi Dadri, killing all 349 passengers.

The probe has been ordered but the authorities were unwilling to brief. Phone calls yielded no result as officials played truant.

According to analysts, the situation at the IGIA is very dismal. The main functionaries like the AAI and DIAL are not supplementary to each other, they are in fact rivals.

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Investor Guidance
NRIs can avail tax-breaks on housing loan
by AN Shanbhag

Q: I am an NRI, holding an Indian passport and working in the USA. I booked a flat in Gurgaon on installment. Part-payment is already made and balance installments I intend to make by raising a loan from either an Indian bank with a branch in India/the USA or a foreign bank. Will I be eligible for availing tax-breaks as allowed to Indian residents in such a case and to what extent?

— Atul

A : The tax-break will only be available if you raise money from a bank domiciled in India. It could be a branch of a foreign bank or a wholly indigeneous bank - the only condition is that the loan should be raised in rupees in India and should be applied for the purposes of buying the house property. Any interest payment up to Rs. 1.50 lakh will be tax deductible. Similarly, a tax deduction of Rs. 1 lakh is available on the principal part of the repayment of the loan.

Father a/c after death

Q: My father, a senior citizen and pensioner, passed away in October, 2009. He had some bank fixed deposits for which I was nominee. My queries are:

1) Who and how will his return for the year FY 2009-10 (AY 2010-11) be filed?

2)Will the interest earned on bank FDRs will be added to my income after his death in October, 2009?

3) Will the FDRs attract interest payable to senior citizens for the remaining period after the death?

— Surinder Singh

A: The best way of handling this situation is to file two tax returns for your father; in the name of your father up to the date of his death and in the name of the estate of your father, until all the after-death formalities are completed. As and when the money gets transferred to your account, the returns there from will get taxed in your hands. The estate of a deceased person is treated as a separate person.

Whether the FDR attracts the senior-citizen premium rate will depend on individual bank rules.

House loan

Q: In one of your earlier columns I have read that charges paid on registration of house can be claimed under 80C. Thanks. I did not know this.

Section XVI of 80C states that "Any payment made by individual for purchase or construction of a residential house property, the income from which is chargeable to tax under income from house property" is also exempt from tax under 80C.

Does that mean if I spend Rs 10 lakh from my pocket (and not repaying a house loan) for constructing or purchasing a residential house/flat, then from Rs.1 lakh (being the upper limit of 80C) is exempted under 80C? What happens in case of joint ownership - will both joint owners get an exemption of Rs 1 lakh each? What happens to the balance Rs.9 lakh? Can I get exemption from that too in the future years?

Uptill now, I was under the impression that only housing loan repayments are governed under 80C and one had to compulsorily take a housing loan to get 80C benefits.

Can a HUF get similar exemption for paying the amount for a house owned by the individual, the individual being karta of the HUF?

Please clarify.

— Rakesh Samar

A : Deduction under Sec. 80C((2)(xviii) is available up to a maximum limit of Rs. 1 lakh to an individual and an HUF, not for a purchase or construction of a residential house but for repayment of amounts borrowed for the purposes of purchase or construction of a residential house property the income from which is chargeable to tax under the head income from house property (or which would, if it had not been used for the assessees own residence, have been chargeable to tax under that head). We request you to go through the entire section and all its subsections for clarity on the matter.

Facts about PPF a/c

Q: With respect to PPF, among the facts commonly known by me and all are as below:

a) Investments into PPF are exempted under sec 80/C (max. limit of investment under this section is up to Rs. 1 lakh only)

b) Maximum investment limit is 70,000 p.a.

c) 8 per cent interest on cumulative basis to be calculated twice in a year.

Now with regards to point (c) above, I would like to know whether the interest calculation on the amount invested is done right from April 2 (April 1 banks remain closed) or on the amount present at the end of 1st six months of that F.Y., i.e. on or after September 30.

More precisely, to get the benefit or to be eligible to get the interest of 4 per cent (for first 6 months), should I invest the amount in PPF immediately and soon after beginning of the new F.Y. on April 2 or can I invest just before September 30 of that F.Y.?

Similarly in case, if I invest just before the end of a F.Y., say somewhere near end of March, will I get the entire 8 per cent interest for that F.Y. on the amount invested?

— Perin Shah

A: PPF interest is not calculated twice in a year.

Interest is calculated on the lowest balance between the close of the fifth day (and not tenth, as in case of savings account) and the last day of every month and is credited to the account at the end of each financial year i.e., on March 31.

Credit used to be given on the date of presentation of local cheques. Normally, the clearance takes two to four days. Thus, one could deposit the cheque on the last date of a month and not lose interest for the month on the savings bank account.

However, this advantage has been recently taken away in order to bring uniformity in the reckoning of the date of deposit in the PPF vis-à-vis all Post Office Savings Schemes, hereafter, when a deposit is made in the PPF account by means of a local cheque or demand draft, the date of realisation of the amount will be the date of deposit. So far it was the date of tender of instrument at the accounting office, provided it was encashed.

In any case, it is advisable to check the accuracy of interest credited every year.

Also, in case a deposit is made by means of outstation cheque or instrument, collection charges at the prescribed rate shall be payable along with the deposit and the date of realisation of the amount shall be the date of deposit (GSR 690(E) dt 27.8.03).

The authors may be contacted at wonderlandconsultants@yahoo.com

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